Non-repayable gift used toward a home purchase, usually documented for lender and insurer review.
A gifted down payment is a down payment funded by money given to the borrower, usually by a close family member or another accepted donor, with no requirement that the money be repaid.
Many buyers can carry the monthly payment but need help assembling the initial equity. Gifted funds can make the purchase possible, but only if the lender and any mortgage insurer accept the source and documentation.
CMHC’s general mortgage-loan-insurance guidance says a traditional down payment can come from sources such as savings, sale proceeds, or a non-repayable financial gift from a relative. In practice, lenders and insurers usually want to see a gift letter, proof that the money has been transferred or is available, and confirmation that the donor does not expect repayment.
The non-repayable part matters. If the “gift” really functions like a side loan, it can change the borrower’s debt picture and the lender’s willingness to approve the mortgage. Gifted funds also do not usually remove the need for the borrower to show enough money for closing costs and other transaction expenses.
Gifted down payment should also be separated from seller incentives, rebates, or credits built into the transaction. Those are different concepts and may be treated differently under lender or insurer rules.
Parents give their adult child $35,000 to help with a first home purchase. The lender asks for a signed gift letter and proof of deposit into the buyer’s account. If the lender accepts the file and the gift is truly non-repayable, the money can form part of the down payment.
A gifted down payment is not automatically acceptable just because money was transferred into the borrower’s account. The lender still needs to be satisfied about the source, timing, and documentation.
Borrowers also sometimes assume a gift can cover every cash requirement in the transaction. A lender may still expect the borrower to demonstrate capacity for closing costs or to meet other underwriting conditions.
Acceptable donor relationships, documentation standards, and treatment of gifted funds vary by lender, insurer, and program. Rules may also differ for newcomers, self-employed borrowers, or special insurer products.